PennyMac Mortgage Investment Trust 8-K

What Happened

• PennyMac Mortgage Investment Trust (through its indirect, wholly-owned subsidiary PennyMac Corp.) announced on December 22, 2025 that it issued an additional $75.0 million aggregate principal amount of 8.500% Exchangeable Senior Notes due 2029 as a reopening of the series originally issued in May 2024 (aggregate outstanding after the offering: $366.5 million).
• The notes pay 8.500% interest semiannually (June 1 and December 1), mature on June 1, 2029, are fully and unconditionally guaranteed by the Company, and may be exchanged by holders for cash, Company common shares, or a combination (Issuer’s election). The initial exchange rate is 63.3332 common shares per $1,000 principal amount (initial exchange price ≈ $15.79/share).
• Net proceeds from the offering were approximately $75.6 million after estimated expenses; proceeds are intended to repay part of borrowings under secured mortgage servicing rights and servicing advance facilities, repurchase/repay a portion of the Issuer’s 5.50% exchangeable notes due 2026, and for general corporate purposes.

Key Details

• Amount issued: $75,000,000 (additional reopening); total outstanding after offering: $366,500,000.
• Interest rate & maturity: 8.500% per year, payable semiannually; maturity June 1, 2029.
• Initial exchange terms: 63.3332 common shares per $1,000 principal (≈ $15.79/share); issuer may settle exchanges in cash, shares, or both.
• Repurchase/repayment: holders may require cash repurchase at 100% of principal plus accrued interest upon certain corporate events; notes are senior unsecured obligations (guaranteed by the Company) and rank behind secured debt to the extent of collateral value.

Why It Matters

• Liquidity and refinancing: The offering raised roughly $75.6M of new capital to reduce secured borrowings and refinance near-term exchangeable note obligations (2026 notes), which can ease short-term funding pressures.
• Cost and capital structure: The notes carry a relatively high coupon (8.5%), increasing interest expense compared with some other debt but reflect market funding costs; the exchangeable feature creates potential future dilution if shares are delivered on exchange.
• Credit and priority: The notes are senior unsecured obligations of the Issuer and are guaranteed by the Company, but they remain subordinated to secured debt to the extent of collateral and are structurally junior to subsidiaries’ obligations — important for creditors and investors assessing recovery priority.